III.

3 End-to-End Supply Chain:

The Integration of People, Process, Technology and Location

End-to-End Supply Chain:

The Integration of People, Process, Technology and Location
Dave Catino
Assistant Vice President Strategy & Planning IT&S HCA Corporate Supply Chain Nashville, Tennessee

Vivien Conner, CMRP

Supply Chain Director Centennial Medical Center Nashville, Tennessee

Jay M. Kirkpatrick, CMRP

Supply Chain Officer HCA MedAmerica Division Supply Chain Nashville, Tennessee

Integration
People Process TECHNOLOGY Location

Why Shared Services?

Supply Cost Rising at 8%-15% Annually Labor Cost Rising Technology Costs Rising
Integration Issues with Technologies

Variability in Process

Supply Chain Background

Launched in January 2000 to:
Protect HCAs Core Business: Patient Care Reduce Supply Cost Increase Productivity Improve Service

Supply Chain Background

Three distinct components:
Consolidate back office functions Share supply cost reduction opportunities throughout the company Work with the GPO in developing and optimizing division contracts for medical devices and standardization initiatives

HCA Supply Chain Strategy

Effectiveness
Reduce Supply Expense

Efficiency
Reduce Transaction Costs
Manufacturer

Supply Standardization/ Utilization

Best Practices
Procurement

Supply Expense Management

Substitution Supply Improvement Program Clinical Physician Preference Contract Model Focused on: Division Based Procurement OR Freight Management Cath Lab Pharmacy Standardization Point of Use

Supply Chain Operations

Consolidation of Procurement Consolidation of Warehousing Deploy Point of Use Technology

Supply Chain Operations

Utilization

Contracting
Warehousing

HCA Supply Chain Services

Denver

Kansas City

Nashville

CDCs (Satellite Warehouses)

Salt Lake City

Portsmouth

Richmond

Las Vegas Oklahoma City Dallas El Paso

BSS

Charleston Atlanta

Houston

New Orleans New Orleans

Jacksonville

Tampa

Miami

HCAs Integrated Supply Chain

HealthTrust Roles
Clinical Operations National Regional Agreements GPO Operations

Financial Roles
System Operations HCA IT&S Financial Operations

Supply Chain Roles

Procurement Accounts Payable Logistics

Product Standardization Utilization

-Product -National & Evaluations Regional Negotiating -Testing -Sourcing -Technology Screening -Legal -Clinical Networking

-Sales -Implementation -Customer Service

-Contract Management -Standard Master Files

- HCA IT&S -Accounting - SMART - POU -Audits -Analysis and Reporting -Financial Support -Systems Support -Internal Controls

-Requisitioning -Purchasing

-Matching -Payment Processing -Accruals

-Shipping -Receiving -Put Away

-SKU Standardization

-Waste Reduction -SMAT -Appropriate Utilization

-Communications
-Compliance

-UPN
-Classification

- WMS
- EDW - GHX

-Replenishment
-Distribution -Storage

Our mission is to obtain the best price for clinically recommended products, ensure their timely delivery, and continuously evaluate and improve our services to the patients, physicians and clinicians we serve.

Supply Chain Core Operating Systems

Replenishment

WMS
Item, PO, ASN, RMA, Reqs, SO

IMS
Item/vendor, contract info, contract participation info

POU

Item, Par, ASN

ADT

Receipts, Ship Con, Inv. Adj. Inv. Stock Balance, Some inv. moves

Replenishment Charges

Imaging
Invoices Reports Vouchers and Vendors All Transaction History EDI

SMART

Selected Item and Vendor Data

Meditech

Host AP
Payment History

Reqs

Intranet Supply Chain Website

Item and Par

Data Warehouse

Remedy & Symposium

GHX Connect Plus

GHX Catalyst

In The Beginning

Host AP

Vouchers and Vendors

SMART

EDI

GEIS

Materials Management & Accounts Payable

SMART homegrown MMIS. Heart of Supply Chain Processing
Order Management Purchasing, Distribution, and AP AIX platform MicroFocus Cobol

Materials Management & Accounts Payable

Host Accounts Payable homegrown system which receives vouchers from SMART AP and generates payments to vendors.
Mainframe-Based, Cobol

GE Information Systems
Value added network for trading EDI documents

Operational Advantages and Opportunities

Pros
Good Order Management System EDI Connectivity Mainframe AP Application

Cons
Variability in Setup and Operation

First Steps

Replenishment

POU

Item, Par, ASN

ADT

Replenishment Charges

Host AP

Vouchers and Vendors

SMART

Selected Item and Vendor Data

Meditech

EDI

GEIS

Point Of Use
SupplyScan
Partnered with McKesson in 1999 Installed in all acute care facilities Integrated with Meditech clinicals application ADT Patient charging Integrated with SMART MMIS Item/PAR Replenishment Advance Ship Notice

Operational Advantages
Automated Charge Process Cards, Stickers, Labor Hours Eliminated Nursing Satisfier FTE Reduction Elimination of Count, Pull, Replace Process Eliminate Keying Charges in MMIS Min/Max and Critical Levels vs. Top Off

CSC Consolidation Begins

POU

Replenishment

Item, Par, ASN

ADT

Replenishment Charges

Host AP

Vouchers and Vendors

SMART

Selected Item and Vendor Data

Meditech

EDI

Remedy & Symposium

GEIS

Supply Chain Call Centers

Symposium an automated call distribution system that appropriately tracks and routes calls to specialized areas of support.
Established multi-hospital customer service operation

Supply Chain Call Centers

Remedy Call tracking and logging
Log analysis - Enables root cause problem resolution

Data Captured for Key Performance Indicators

Hold times, Abandonment Rate, Logs Open > Week, % Rush Calls, % A/P Calls, % Purchasing Calls, % Warehouse Calls, Facility Call %, Vendor Call %, Call Logs, Open Call Logs Closed

Operational Advantages
Hospital
One Point of Contact Faster Resolution Timeframes Issue Tracking

Division
Purchasing, A/P, and Warehouse Staff Process Without Constant Interruption Defined Audit Trail of Issues and Resolutions

Expanding Requisitioning & Supplier Connectivity

POU
Item, Par, ASN ADT

Replenishment

Replenishment Charges

Host AP

Vouchers and Vendors

SMART

Selected Item and Vendor Data

Meditech

Reqs

EDI

Item and Par

Remedy & Symposium

GHX Connect +

GHX Catalyst

GHX
Catalyst Requisitioning
Hosted by GHX Functionality
Special purchase requisitioning Capital purchase requisitioning Round trip w/ Dell Stat Rec in development

Connect + Data Exchange

Replaced GEIS EDI Compliance 88.5% Statistics
88 Supplier Divisions $1.2 Billion in Volume 535,000 annual POs 2.9 Million PO Lines 450,000 Invoices (2005)

Interfaced with SMART MMIS

Documents
PO (850) PO Confirmation (855) Invoice (810) Sales Tracing (867)

Operational Advantages
Facility
Key Enabler to Move Purchasing Offsite Approval Workflow and Visibility Supports Standard Vendor Order Calendar

Division
SPR Interfaced in MMIS (SMART) Reduction in Purchasing FTEs

Warehouse Automation
WMS
Item, PO, ASN, RMA, Reqs, SO

Replenishment

POU

Item, Par, ASN

ADT

Receipts, Ship Con, Inv. Adj. Inv. Stock Balance, Some inv. moves

Replenishment Charges

Host AP

Vouchers and Vendors

SMART

Selected Item and Vendor Data

Meditech

Reqs

EDI

Item and Par

Remedy & Symposium

GHX Connect +

GHX Catalyst

Warehousing
Partnered with SSA (EXE) in 2000. Software manages 4-walls of warehouse
12 15 Hospitals Per Warehouse Receiving, Put-Away, Picking, Shipping, Replenishment Daily deliveries RF technology (hand-held and wearable)

Hardware Located in Regional Data Centers SMART MMIS integration Internal ASN via scanning at POU

Operational Advantages
Integration to POU Min/MAX to Increase Picking Efficiency in Warehouse Reduction in Picking Errors Electronic Pre-adjusted Picking List Advanced Ship Notice Elimination of Hospital Storerooms Disintermediation

Optimization!
WMS
Item, PO, ASN, RMA, Reqs, SO

Replenishment

IMS
Item/vendor, contract info, contract participation info

POU

Item, Par, ASN

ADT

Receipts, Ship Con, Inv. Adj. Inv. Stock Balance, Some inv. moves

Replenishment Charges

Imaging
Invoices Reports Vouchers and Vendors All Transaction History EDI

SMART

Selected Item and Vendor Data

Meditech

Host AP
Payment History

Reqs

Intranet Supply Chain Website

Item and Par

Data Warehouse

Remedy & Symposium

GHX Connect+

GHX Catalyst

Standardization and Imaging

Item Management System Collapsed 3 systems into 1 Houses standard Item and Vendor numbers as well as Contract Pricing Imaging Hyland On Base Imaging solution which is used for storage and retrieval of Purchase Order, Invoice, and Voucher information. Eliminates routing of paper throughout the division.

Data Warehousing
Supply Chain Data Warehouse
Teradata platform 2.1 billion rows Data mined and reported via Business Objects, VISTA, AdHoc 250,000 individual reports run against the EDW in 2005 shared between 11,000 distinct users

Supply Chain Website

SC Website (292,000 hits in 2005)
2000+ pages of P&P, Business Flows, Forms (Business Standardization) Supply Cost Management Data and Information SC Communications and Education (SCU)

Operational Advantages
Standardization
Product and Process Standardization Enabler to Warehouse Consolidation 200 to 12 to 1 Cross Hospital Reporting Consistency

Imaging
Enabler to Accounts Payable Consolidation

Supply Chain Core Operating Systems Location Schematic

Host (AP, GL) Mainframe RCS Mainframe

Nashville RDC EDW

Server Database Server

IMS

Web Server Application Servers (2) Warehouse RF Scanner PC Workstation Laser Printer RF Access Points Zebra Label Printer

GHX
Vendor Site
Session Server Database Servers GHX Cloverlea f SMAR T Master Tower

Reports Servers

WMS

Application /Web Servers PC Workstation Laser Printer Materials Management PC Interface PC

RDC
D D weE e 3

POU
Facility

wE e e 3

HCA Cloverleaf

SQL DB Server
D

Citrix Server
D weE e 3

weE e 3

EC Server
w3E e e

Communication Server
D

Sato Printer

Application Server POU Scanner SMAR T NurseStation Meditech

WMS
Application Server

Whats Next?
Optimization, Optimization, Optimization Pharmacy Cath Lab Operating Room

Questions?